2001 OASDI Trustees Report

B. SOCIAL SECURITY AMENDMENTS SINCE THE 2000 REPORT

Since the 2000 Annual Report was transmitted to Congress on March 30, 2000, two laws have been enacted that have direct financial effects on the OASDI program.

First, the Senior Citizens' Freedom to Work Act of 2000 (Public Law 106182, enacted on April 7, 2000) eliminated the Social Security retirement earnings test beginning with the month in which a person attains normal retirement age. This amendment is effective with respect to taxable years ending after December 31, 1999. Additional provisions of this amendment are described below.

• For any earnings in months prior to attaining the normal retirement age within the calendar year of such attainment (2000 and later), the new law applies the earnings limit formerly specified for those at the normal retirement age ($17,000 in 2000, $25,000 in 2001 and $30,000 in 2002) and the corresponding reduction rate ($1 for $3 offset).

• The new law permits, beginning with the month in which the beneficiary reaches normal retirement age and ending with the month prior to attainment of age 70, the retired worker to earn a delayed retirement credit for any month for which the retired worker requests that benefits not be paid even though he/she is already on the benefit rolls.

Second, Section 308 of H.R. 5662, enacted by Public Law 106-554, on December 21, 2000 (the Consolidated Appropriations Act, 2001) requires that payments to beneficiaries of the OASDI program be made to compensate for any shortfall resulting from a technical error in the computation of the Consumer Price Index for 1999.

The actuarial estimates shown in this report reflect the expected effects of these amendments. Each of these amendments has a significant effect on the short-range operations of the OASI and DI Trust Funds (see section IV.A4). However, the long-range financial effect of each of these new laws on the OASDI program is negligible (see section IV.B7).

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